Stop Trying To Get Rich. Get Better.

stop trying to get rich get better and if you get better getting rich will happen as a consequence getting rich is an outcome getting better is an input most entrepreneurs are focused on the output as the thing and so they're scattered in terms of where their focus is because they're just trying to do everything they can to drive this number up rather than trying to do the thing that creates the wealth I see a lot of small business owners circling around asking the same question which is figuring out how they're going to scale and your

almost all doing it the wrong way John Paul deorio said you don't want to be in the selling business and everything that I described at this point is very much the selling business and so the only way that you can grow that business is selling more units is selling more customers and that's a very terrible business to be in and that's also the business that 95% of businesses are in is they're constantly struggling for leads they constantly are trying to figure out where my next customer is coming from and if this is you then listen

to what I am saying right now if your goal to grow your business is you say okay I sell books great I sell books in order for me to grow my book business I have to get more people to buy my book and that's it period Well if you do that um there's you literally just have to Market and sell for the rest of your entire life and the only way to grow your business is to advertise more that's literally it the only way to grow and so unless you're supremely good at advertising and you

learn how to master Affiliates you learn how to master SEO you learn how how to master making content you learn how to run paid ads you learn how to do email you learn how to do outbound right you learn how to do all these things so that you can maximize your sales unless you do that and the thing is is and this is what sucks is that the next month you have to reload all of your sales again you have to start at zero again and that sucks and that's how the vast majority of businesses

live but the thing is it doesn't have to be that way you have to look at the back of the business and say why are there so many holes in my bucket because just pouring more water into the holy bucket like everyone understands this conceptually but we don't act that way and I say this from experience because in the earlier part of my career I only chased revenue and I chased profit I just wanted I wanted growth at all costs but the thing is is that sometimes the cost of that growth is the long-term growth

of the business and so it's like you sacrifice the long-term growth so that you can grow faster in the short term and so big picture what what you what you want to do is figure out something that people don't stop buying and I feel like I say this over and over again but like no one does it and so it doesn't have to be a recurring business model you just have something that people either tell their friends immediately about so like in the book instance we sell almost a million dollars a month in books I

don't advertise the books right and it's because people read it and then they post about it they tell their friends and then other people buy the book and that that Circle goes on it's because we spent more time on the product and it's the sandwich shop that's like I have to sell more customers into my sandwich shop but their sandwiches are just mediocre and so they're going to be stuck forever trying to figure out what the new Hook is and to be fair I wrote a book on offers and I think that's important when you're

getting started but long term the offer just gets them in the door how well you deliver on the offer is what's going to keep them paying over and over again it's going to get them to send referrals I'll tell you a story so I had a friend of mine started a cookie business and when he started the cookie business this is what he did he went around the country to the top cookie stores and chefs or Bakery chefs I don't know what they're called Bakers and he asked them if he could just hang out with

them and learn how they bake their cookies and they were you know some of them said you know pound sand but some of them were like sure you can hang out and so he learned what they did to bake cookies and then when he came back home he baked a new dozen cookies every single day for a year and he numbered all the batches and he had 365 batches of cookies and every time he did it he gave it to Tasters and then people would say you know what I like this I don't like this

whatever and so by the end of that time period when he opened his restaurant guess what also happened the many people who had tasted his cookies he got their numbers he was giving free cookies away so that he could figure he also generated leads from his area and then he opened and had a a a smashing success of a business selling premium cookies in a local market which is a tough business to be in but he crushed it and he did it because he spent 365 days doing the work to figure out the hundred tiny

details that make a perfect cookie and so like if you're in the sandwich business if you're in the SEO business if you're in the in the mechanic business it's figuring out what we need to do to make the cookie that much better and that's the work that no one's willing to do and that's the good news is that's the opportunity that's the opportunity that most people aren't willing to do they're always like if you ask small business owners what do I need they say I need more leads they all say that now if if everybody

says they need the same thing to me that's a big light bulb that if they're all pursuing the same thing and none of them are growing then they're probably looking for the wrong stuff and if you've been stuck at the same level for a long period of time listen to what I'm saying right now you have to find out why people aren't buying again you have to find out why people aren't referring their friends and sometimes you're like well when I ask them they don't tell me it's like sometimes you have to read between the

lines and that's the hard part but that's the work like that's the work and I get I get I get I get a little bit peeved about this because I see so many small business owners that aren't growing and they're not growing because they're always thinking about how they're going to get more leads but they're not realizing the fact that they have to get more leads because they have so many holes in their bucket and so there is a level advertising that you have to maintain in order to test my friend with the cookie store

had to go out to people and he had to get them to try the cookies but the objective once he had his second batch of cookies wasn't like oh I need to give out you know 12 batches a day no that wasn't the goal at that point the goal was to refine the product refine the service make it better get the onboarding the recruiting the hiring the training of the employees so they could deliver the service good enough so that when he scaled the quality of the product remain the same or ideally had a process

in place that that it would improve over time but people rush to scale because they have some sort of insecurity about I have to make progress but the thing is not all progress is measured in Revenue immediately some progress happens at a delay and so one of the biggest progress markers that happens at a delay is product and so when we talk about delayed gratification one of the ways that you can exercise that muscle of learning to delay reward for the work you do is improving the thing that you deliver because if you improve your

sales you're going to immediately see a jump if you improve your Le you'll immediately see a jump and that's why it gets so addicting for small business owners because they say oh look I improved this little sales thing and look we're making more money and yes you are making more money but the thing is is that you're not going to make the big money the monster money comes from the back end the reason you can't afford your leads there's never not enough leads I like I want to impress this upon you there is an unlimited

amount of traffic in the world across all media you've got radio you've got newspaper you got direct mail you've got you've got Instagram you've got Facebook you've got YouTube You've Got Tik Tok you've got you've got Spotify ads right you've got podcasts you've got Affiliates you've got there's SEO there's so many different places where eyeballs are the problem is not that you don't have enough leads the problem is you can't afford them because your product sucks like this is the problem and so you have to build it back to front you can consistently think about

this from a competitive Mo perspective if you make the same amount of money per customer as your competition then you are always going to be in a race to the bottom and when I say race to the bottom I mean a race to the bottom of CAC you want to all you're going to be doing is trying to find little hacks to to hack social media to hack ads to do whatever and those hacks are always short-lived the biggest businesses and I look at this a lot because I spent a lot trying to trying to

think okay how's Alex going to get to a billion how's Alex get to 10 billion is I look at the biggest companies and the thing is is that have you noticed that the biggest companies aren't doing the Instagram hacks have you noticed they're not trying to do these little like oh yeah if you put this hashtag at the bottom like oh if you do this little call out or the shout out like if you noticed that they don't do that and the reason they don't do that is because they don't have to because they have

won the long game and the long game is the LTV game it's how much is a customer Worth to me and so Dan Kennedy said this a long time because he who can spend the most to a Car customer wins and I rephrase that as he who can make his customers the most valuable wins because being able to spend the most is a product of how much you make a customer worth to you which is a function of what the gross profit is and how many times they buy and the how many times they buy

function has a direct proportion to how good the quality of the product is and by the way when you improve the quality of your product guess what happens you get referrals now think about this I want to again we have to play this out two three steps if you start marketing let me tell you some truths that will not change advertising will always become more expensive the cost per eyeball will always go up you look at cpms on Facebook you look at cpms on YouTube the costs per eyeball always always go up on every platform

and as you scale your advertising will go to colder and colder audiences and it will become less and less efficient this happens at scale these are truths these will not change these are facts and so if you want to scale a business how can you scale if there have two things that are going in a linear Direction against you the cost of advertising to reach the eyeball goes up and the conversion percentage of those eyeballs also goes up because you go to a bigger and bigger audience that knows less and less they're less problem aware

and you have less product aware and you have to do more education up front to a less interested audience this happens this is an inevitability and so how do you combat that one of the cool ways that you can increase LTV for almost any business is actually building a community around your business and so I just became coowner of school.com and you can go there and we have facilitated and made super super easy getting a community built and monetized and thriving and so whether you want to start a community business which is you know one

type of person or you're already a business owner um it's a great way to increase the LTV of your customers provide more value to them and have one place that you can always disseminate all your information all your announcements to them to continue to extend the LTV and you can go to school.com games or just school.com and you can start for free you combat that by having referrals and referrals come from every sale and so if every sale one that person keeps buying and two they send you another customer guess what happens that cat gets

cut in half and so you need an equally strong compounding vehicle that works in your favor to maintain your lcvd CAC ratio and so when you improve product you also decrease CAC via referrals at scale so it doesn't matter how much scale you have if you deliver an exceptional product you will be able to have you always know that 1.3 customers or every customer brings you you know whatever3 new customers on top of that so you decrease your cost require by 30% and you get the LTV boost that happens on the back end as well

which is that they buy more and they they spend longer they're willing to pay a premium and so forth and the third third wheel of that in terms of product is that product is the end of the brand cycle so if you think about brand is a reinforcing Loop right in the beginning when you start a company you make a promise fundamentally that's how you enter Marketplace you say I'm going to solve this problem that is my promise to you all right and anyone can say that what builds the business over the long term is

your ability to deliver on that promise otherwise it's the same reason you see all these [ __ ] internet marketers who change Who start a new a new business every 6 months and the new businesses they're like I got to find the next offer because they're so frontend obsessed because they never figure out what was wrong with your first offer people bought it the problem is you couldn't deliver on it and so just little Vegas Warning Sign by the way if you see the same guy changing up his offer every 6 months is because he

doesn't know how to keep his promises he lacks the skill of product he lacks the skill of delivery he lacks the skill of being able to recruit hire and manage a team that can deliver consistently he lacks that skill and so honestly what happens to that person over time their reputation gets degraded you start saying this guy's a a h a has been he he's washed up all he does is promote new stuff he's a shill he just sells whatever is hot and many of you are that person and so you keep trying to find

new ways to get leads when you can't keep your promises if you keep your promises and you put all your focus there your CAC will go down it will continue to go down and that's what's crazy is that the more you do that the more you reinforce the brand Loop because you make a promise you keep that promise and then the people you keep the promise to tell other people you kept the promise and then that decreases your ca the inverse of that and this is there's a there's a quantitative test for this if you

run advertisements and your cost to acquire customer increases at a faster rate than the average cost of cpms the cost per impression in your market then it means you have Word of Mouth working against you think about this everyone understands positive word of mouth we all get that right we're like oh yeah I get referrals did you know that you have far more negative referrals you have way more detractors you have way more people that when they see an ad of your business what do they do they reach out to other people to ask about

you and then then people who would have purchased choose not to based on information they get online or asking someone they know and so your conversion rate decreases over time you complain that ads aren't working when in reality all of this is the Invisible Hand of your product sucking I get passionate about this because I just I see it so many times and it's the thing that that keeps you stuck and so the only way to combat this is to become a worldclass marketer and just only know how to sell [ __ ] and hey

if you're selling to a really big Market I'm going to be honest with you there's a lot of really big name marketers that the only reason they make money is because they sell to the ocean of humanity and they only need one transaction and they spend all of their trying time trying to Arbitrage media as in they know what their cost per impression is they know how much they make and they just Jam as much as they can in there but that's not a business that is a cash flow job that you get really good

at with that skill but that's also why marketers have terrible reputations building a brand is in my opinion the good side of marketing and the brand is simply the associations that people have with your product and if those associations are positive then you build that reputation you build that positive Association and that takes time but if you make the brand your end goal then you will be able to charge higher prices than other people for the exact same thing and people will purchase from you because from a value equation perspective their perceived likelihood of achievement

goes up their risk associated with the purchase in terms of what they believe their ease and the ease of achieving what they're going to get goes up and even if your time delay is slower they have so much conviction that you're going to deliver on your promise that they're willing to pay the premium and so your cost to acquire customers goes down at scale brand driven advertising is more profitable than the pure scammy direct response stuff it just takes longer but the Raz is insane it's not like 2x 3x it's like 30 100x it's way

bigger and that's how companies like apple print money they print money look at their marketing spin they print money because they have a line of customers that bought their last product and just by knowing that they have a good reputation of delivering on their promises they buy the next one and so I'll tell you a story that happened for the one of the probably the first time I really saw this was when I was uh when I I was probably a year into gym launch we're ripping and roaring right in terms of scale and you

know everyone's just printing money using the system that we had right and I launched something called uh I think I called it LNS at the time which was like lead nurture system something like that I can't remember what I what I called it but basically it was we no aln it was automated lead nurture that's what it was aln and so I did this big webinar I did this big launch and because gym owners are business owners there was a number of them that couldn't make it on the live but they heard that I had

sold told this thing the amount of people that reached out after the webinar not having seen the webinar and said hey here's my credit card number whatever it is just give it to me I I if if he launched it I know it's good I had never had that happen in my life and I was like how do I never stop this from happening again I want this to always be my norm and it reinforced so strongly how important it was to keep your promises and so there's there's a relationship that I think is missed

a lot especially in the the info and online space and I want to hit on this but it applies to all businesses is that there's three lines that you have to keep in touch with you have the price that you charge you have the value that they get and then you have the cost associated with delivering the thing and so you want these lines to be as far apart as humanly possible all of them you want them to be spread out super super far you want to have crazy high value at the top you want

a price that's a premium and then you want to have a lot of juice left over relative to your cost and the way to get that kind of space between your cost and your price is to do the work of the hundred details that your competitors aren't willing to do they're not willing to find out that when someone walks in the restaurant if we just we find out what their name is at the car we can greet them by name small thing right and we have the waitresses all write down on the on the on

the on the receipt what their name is and say thanks for coming in ow whatever right and we try to make sure that they all get their Waters within 30 seconds of sitting down we make sure that they get their bread within 2 minutes we make sure that but we check in every five or every 10 or whatever we've tested has been the right amount and maybe it maybe it comes down to asking the customer up front hey is this something do you want like do you want me to come like is this a fast

dinner or is this something you want to kind of like juice and enjoy I will I will match your Cadence maybe simply asking the question draws attention to the fact that you care it might not even matter what you do but maybe simply asking the question improves their experience and so it's these 100 BBS no silver bullets that the good news is that your competition is lazy as [ __ ] it's so easy think about how many business like I do business with a lot of businesses on a personal level on a business level I

would not recommend most of them and the thing is is that those vendors think that I'm an amazing customer I'm I'm a hair away from being a detractor and many of you have customers that are a hair away from being attracted sometimes you got customers who pay for your thing and still tell people not to buy it my pool guy when I had a pool I don't have a pool anymore but when I had a pool that guy was so inconsistent he didn't clean stuff all the time i' I'd walk out afterward be like what

what did he even did he even do anything this week right but I still paid because it was just such a hassle to change but I was Absolut attracted when my neighbor like oh yeah who's your pool service I'm like don't use my guy I just don't have time to find somebody else they're like oh thanks and and that small business owner is like man I have such a great business like and like we'd have gym owners who thought that their their gyms were hot [ __ ] and then somebody opens up across the street

and literally takes all their customers what they didn't realize is the main reason people went to their gym is it was just convenient they thought all of their workouts they thought all of their music they thought they thought the the the the layout of the gym the equipment there they thought all that was important but the thing that mattered most was that you just happened to be the only gym in a 5 mile radius of this spot and so a lot of times the thing that the reason that you're winning you don't even know why

you're winning and so professional uh Professor berglan from Stanford said this he said it's better to know why you have failed than to succeed and not know why and I always I think that's a very profound statement because for us as business owners we we're always willing to attribute negative things to outside forces right we're always willing to say oh you know Co happened my business got hurt or whatever right the economy is bad credit rates are compressing but we aren't willing to give outside forces the credit for when we do well we're like oh

no that was me that was that marketing initiative oh yeah that's cuz we've been really working on the team it might just be nothing to do with you at all and so understanding what are the drivers that actually drove the success are some of the things that you have to find out that your competition doesn't know so many business owners just believe in mythology they just they just make up narratives around why they're successful and they have no way to prove it one of the things that I see people just melt in front of me

when I ask they're like well this is uh you know they basically tell me a story about their business they say well people don't do that because and then they insert some make belief thing and I say how do you know that and then they just look at me like how do you know that they don't they've never measured it I had a vendor recently uh who was like hey we need to do this this and this uh with uh with something on media and I was like okay why he was like well this is

going to create more growth and I said how do you know that and then he gave me another stat and that stat was derived from the first stat that he said to increase he said when this increases this increases I was like no [ __ ] do you know how math works of course of course it does now to be clear I don't think this was out of malice to be very clear but no one thinks and the good news is your competition doesn't think either and so if you want to win you just need

to stop like whenever someone gives you a because statement in your team just ignore it and if they do give it to you and you in and you insist on trying to listen to it then say how do you know that and most of the time they're like well you know gut feel like your gut feelings me nothing to me if you haven't tracked it and you have no data to support it then you I can make up things too when you hear podcasts of of of business people and they're telling you the things that

work for them the crazy thing is that most of the time they don't know either and so this is what drives me nuts people are like hey Alex do you think that you know having a hard childhood even having a troubled relationship with your father I don't we're fine right but do you think that is the reason that you're so driven I'm like I don't know how would I know I know that I am driven there's OB zillion things that have happened to me in my life I don't know which one it is but we

create these narratives around it to believe it and I and I'm and I'm I'm bringing this kind of conceptual idea because right now many of you are creating stories that you tell yourselves to make yourself feel better about why your product isn't as good as it should be but you have an excuse that only you need to believe and you believe that excuse so it excuses you from working harder on the stuff you know you should be doing but aren't and that that work the work you know you should be doing but aren't is the

opportunity because that is the work that your competitors also aren't doing and I'm telling you from the bottom of my soul it is so easy to beat people today they are so soft they have no work ethic no one can stick with anything everyone's distracted they're on social media they're their [ __ ] notifications because they can't stick with [ __ ] they can't say no and so sometimes you got to say hey guys we're going to stay at this Revenue level until we get referrals over 30% we're going to stay at this Revenue level

we're going to stay at this level of advertising because I don't want anyone else to know how mediocre our sandwiches are why would I tell anyone else I don't want anyone to know if I could test this with no one knowing I would do it but we have to advertise a little bit so we can fix our thing but the point of that first phase of growing the business because you start making sales is to get better not to get rich the point in the first phase is to learn not to earn if I started

a new cleaning business tomorrow the first year would just be trying to nail the model I wouldn't be I wouldn't be thinking about what we're growing every I wouldn't care I would only be focused on how can we make this experience so that no one leaves and that's all my obsession is because I know that once that happens whether you sell One customer a month or five customers a month or 10 customers a month your business will not stop growing if you do not lose customers your business will not stop growing and so while every

one of your competitors are looking for cheaper leads and trying to find the new place where they get do their little hacky Instagram thing you can sleep well at night knowing I sold 10 customers last month and this month I'll sell another 10 but I'll have 20 and the month after that I'll sell 10 and I'll have 30 and the month after that I'll send 10 and I'll have 40 and we will just keep [ __ ] growing because I spent a year or two years or 5 years figuring out exactly what to do that

delivered for my customer and that is the work that no one will do and that is why entrepreneurship is much more a a battle of wills than it is a battle of intellect you have to be willing to delay gratification for an extended period of time and eat glass and that eating of glass is seeing how many failures you have until you get it right and this is the difference between small businesses and big businesses is their willingness to put put up with that long period of time of getting the product right and then once

you get it right you can scale to the Moon because you will make more than everyone else on your back end you will deliver on your promises your brand will be reinforced with every sale rather than degraded with every sale and then at scale you will continue to be able to acquire customers profitly because you have a force that is compounding which is the referral base of customers that tells other people how good your stuff is while also continuing to purchase themselves so in Silicon Valley they have a saying which is you know break break

things move fast I think that was one of Facebook's early you know values um that break fast and move stuff is building back to front that is building the product through iteration so that you can have extended LTV so that you can have the activation of users so that because fundamentally think about this way if Facebook did not get users activated and they were like we need to spend more on marketing so we can get more users it would never work at scale it has to have a compounding vehicle built within the business and the

compounding vehicle in the business for most businesses is the quality of their product that is the compounding vehicle you have to get people to continue to buy or continue to use in Facebook's use in in Facebook's case and so they have to think about how can we eliminate friction in a hundred different ways so that we can make it smoother I mean this is what we work on at school all the time is how can you make this easier how can we make this faster how can you make this more streamlined so that anybody can

be successful with it in most small business owners fix one or two things and then they immediately want to scale they want to gas the advertising to make more sales and the problem with that is that it does this so you increase sales and so by percentage growth it'll be really aggressive and it starts slowing down and you can always tell growth of businesses like this especially at the 1030 $100 million Mark and they're not even close to their total addressable Market because the only way they grew is through jamming sales and marketing not through

having a product that compounded and so that is the big difference between massive multiples in companies when you to sell for 20x 50x you know massive numbers because the person who's acquiring it has no doubt that that business will continue to compound and grow if the business is purely based on Marketing sales then they know that it's only as good as it's last month and if the marketing director leaves or or their their sales channel gets shut down then the business is going to rapidly Decline and so not not only does it make the company

significant more valuable it also makes life a lot more chill as an entrepreneur because you know that this month like last month like two years ago the customer you bought you sold two years ago put that all that effort in they're still buying today improving your product is the highest leverage thing you can do because every single person gets that product and so you work on it one time and then it's you know cut cut once sell 100 times cut once sell a thousand times whereas marketing is a is a linear relationship you have to

go market more to get more customers but if you continue to improve the product that thing can get you 100 times more customers or massively increase LTV and so you get a disproportionate return on the effort you put in on making your thing better than you do on getting more customers chunking up what we're tracking with product is the price that we're able to command for our services or our product the number of recurring purchases that we have from somebody so if you have a reoccurring business it's average number of orders that someone's going to

make with your business over a lifetime or it's the churn associated with your subscription or membership and so these give you the quantitative outputs of a highquality product but the inputs are going to be closer to what are their activation metrics like what is and the way that you look at this is you you do something called a regression analysis around okay let's look at the cohort of customers that don't cancel because there is hopefully some customers that don't leave you and you look at what things occurred in and you have to look at a

lot of variables of what things occurred uh in those customers that haven't occurred in other customers and then once you find those things that occurred those become activation points or at least your first guess at activation points and then what you do is you drive your onboarding towards that activation Point some people got a retention point and then you remeasure again and so if you know that once people you know achieve a sale from SEO for your agency that the likely the cancel goes down precipitously then all of your effort for onboarding is how quickly

can we get them a sale from our SEO if it's for weight loss you find out that somebody needs to lose seven pounds in the first two weeks and if they lose the weight then the lik that they continue to stay is very high so then you drive all of your activation your arm boarding towards getting to that point and so everything is about looking at the people at the end looking at the thing that preceded them getting to that point and then putting all of your focus on getting people to have that experience at

the most basic level I had a first book and many people who bought this book and liked it bought the second book when it came out obviously we had a launch but the thing is is that we still sell thousands and thousands and thousands and thousands of copies of this book every single month and even though this book is 2 and a half or three years old or whatever it is this still sells thousands and thousands and thousands of copies every month because there's also new people every month that are getting into entrepreneurship or want

to learn about uh making better offers for their business and so the people who upsold between product one and product two many of them saw nothing besides the fact that they found out that I had another book out and then bought it and I don't say that in a self-aggrandizing way I say that because like I've lived the other way and it's much better to do it this way and if you're trying to increase LTV to have a compounding business model then one of the first things you need to do is do the unscalable I

made an entire video about it go check it out it'll probably help you out